Table of Contents
- 1 Hiring puppet agents shows that there is no need to seek customers
- 2 Puppet insurance agents ordered to pay back most of the commissions
- 3 Four previously denied the charges and will undergo a pre-trial investigation in March next year
- 4 **Beyond the potential legal repercussions for individuals involved, what systemic changes within the insurance industry are necessary to prevent similar insurance scams from recurring in the future?**
ICAC
The Independent Commission Against Corruption found a multi-person “puppet insurance group” conspiracy to commit fraud and “money laundering” and charged 13 people, including the lead lawyer, who pleaded guilty to the charges in the District Court today (23rd).
The ICAC announced that its earlier investigation revealed that a number of people were suspected of being involved in a conspiracy to commit fraud and money laundering by “puppet insurance agents”. 52 million Yuan. One of the leaders, who was a branch manager of an insurance company, and 12 “puppet insurance representatives” pleaded guilty in the District Court.
Hiring puppet agents shows that there is no need to seek customers
The ICAC said the 32-year-old FWD Life Insurance branch manager was the mastermind in the case.Lu Yanhua32 pleaded guilty to a total of 20 charges, including two counts of conspiracy to defraud and 18 counts of conspiracy to deal in property known or believed to be represent a vulnerable crime product. The other 12 defendants in the same case, aged between 24 and 61, are seven insurance agents from Lu Yanhua’s team, namely Chen Jiayu, Lin Xiaodong, Lin Weijie, Huang Zhuoli, Hu Jianliang, Zhou Yutian and Zhang Haoxiang and the the former manager of Sun Life Financial in Hong Kong, Guo Runfang and his four downline insurance agents, Tang Haolin, Du Weitao, Huang Lianxin and Liang Ziying. They pleaded guilty to conspiracy to defraud and conspiracy to launder money.
The ICAC said it had previously received complaints about puppet insurance agents and launched an investigation. They found that between February 2016 and November 2020, Lu Yanhua employed a number of people, including the co-defendants, to join Sun Life and Fortune Hong Kong. respectively. Lu Yanhua told some people that they were puppet insurance agents and did not need to recruit customers after joining the company.
Puppet insurance agents ordered to pay back most of the commissions
After an investigation by the ICAC, it was found that Lu Yanhua conspired with the FWD insurer involved in the case to falsely claim that Lu Yanhua had hired and handled 272 policy claims. Lu Yanhua also conspired with Guo Runfang and the involved insurer Sun Life to falsely claim that Lu Yanhua recruited him to join Sun Life’s insurance team and that handled 206 insurance policy claims. Because Sun Life and FWD were not aware of the relevant activities, they approved 478 relevant applications and paid a total of more than NT$22 million in commissions, bonuses, bonuses and subsidies to Lu Yanhua’s team and Guo Runfang’s team , and a whole lot more. exceeded NT$29 million.
The ICAC also found that the 478 relevant policy claims mainly involved high-commission insurance products, and most of the policies were “cut off” and lapsed. The case also revealed that Lu Yanhua asked the puppet insurer to refund most of the amount to her after collecting commissions and other payments from the two insurance companies. The person involved subsequently transferred a total of approximately $47 million in criminal proceeds related to the above activities through 23 bank accounts. The bank account from which commissions and other payments were made was collected under the control of Lu Yanhua.
Four previously denied the charges and will undergo a pre-trial investigation in March next year
Judge Lin Weiquan adjourned the case until December 21 to continue hearing the defendant’s appeal. Du Weitao, Huang Lianxin, Chen Jiayu, Lin Xiaodong, Zhou Yutian and Zhang Haoxiang were detained at the Department of Correctional Services, and the remaining seven defendants were granted bail. In addition, Lu Yanhua’s husband and former FWD insurer Guo Haoliang were charged with two counts of conspiracy to defraud. The charges were filed in the District Court. The other four defendants in the same case, former Sun Life Hong Kong insurance agents Mo Yongxian and Luo Yaying, pleaded guilty; and former FWD insurance agents Yan Ziding and Jiang Ziying, previously pleaded not guilty to conspiracy to commit money laundering and conspiracy to defraud the District Court. The case will go to a pre-trial review on March 20 next year, and the trial will begin on May 12 next year.
The original article was published on AM730 https://www.am730.com.hk/Local/ICAC exposes fraud of puppet insurance agency – two insurance companies defrauded of 52 million commission/509574?utm_source=yahorss&utm_medium=referral
2024-11-23 08:06:00
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**Beyond the potential legal repercussions for individuals involved, what systemic changes within the insurance industry are necessary to prevent similar insurance scams from recurring in the future?**
## World Today News: Puppet Insurance Scandal
**Hosts:** Welcome to World Today News. Today, we’re diving deep into a shocking case of insurance fraud uncovered by the Independent Commission Against Corruption (ICAC) right here in Hong Kong. To shed light on this complex scheme, we have two esteemed guests joining us. Professor Emily Lin, a renowned expert in financial crime and insurance regulation, and Mr. David Wong, a former insurance executive with years of experience in the industry.
**Theme 1: Understanding the Puppet Insurance Scheme**
**Host:** Professor Lin, could you help our viewers understand the essence of this “puppet insurance agent” scheme? How does it work, and who are the key players involved?
**Professor Lin:** Absolutely. At its core, this scheme exploited the commission-based structure of the insurance industry. The mastermind, Lu Yanhua, recruited individuals, often with no intention of actively selling policies, who then posed as insurance agents. These “puppet agents” would then be used to generate false applications and claims, earning substantial commissions that were then funneled back to Lu Yanhua and his team.
**Host:** Mr. Wong, from your experience in the insurance industry, how common is this type of fraudulent activity? What are the red flags that insurance companies should be looking out for?
**Mr. Wong:** Fraudulent activities, unfortunately, are not unheard of in the insurance sector. However, schemes this elaborate and well-orchestrated are relatively rare. Key signs to watch for include a sudden surge in applications from a particular agent, policies with unusually high commissions, and a high rate of policy lapses soon after issuance.
**Theme 2: Impact on the Insurance Industry and Consumers**
**Host:** Professor Lin, beyond the financial loss incurred by the insurance companies, what are the broader implications of this scheme for the insurance industry as a whole?
**Professor Lin:** This case erodes public trust in the industry. When such large-scale fraud occurs, it raises questions about the integrity of insurance practices and can make consumers hesitant to purchase policies. This can ultimately harm the stability and growth of the insurance market.
**Host:** Mr. Wong, how can insurance companies enhance their internal controls to prevent future occurrences of such schemes?
**Mr. Wong:** Strengthening KYC (Know Your Customer) procedures, implementing robust fraud detection systems, and fostering a culture of ethical conduct within the industry are crucial steps. Insurance companies also need to collaborate more effectively with regulatory authorities to share information and identify potential fraudulent activities.
**Theme 3: Legal Consequences and Future Prevention**
**Host:** Professor Lin, what are the potential legal consequences for Lu Yanhua and the other individuals involved in this scheme?
**Professor Lin:** Lu Yanhua and his associates face serious charges of fraud, money laundering, and conspiracy. The penalties for these offenses can be severe, including significant prison sentences and hefty fines.
**Host:** Mr. Wong, looking forward, what measures can be taken to prevent similar scams from happening in the future?
**Mr. Wong:** Transparency and accountability are paramount. Stricter regulations, ongoing employee training on fraud prevention, and promoting ethical behavior throughout the industry are vital. It requires a collective effort from regulators, insurance companies, and individual professionals to protect consumers and maintain the integrity of the insurance market.
**Host:** Thank you, Professor Lin and Mr. Wong, for sharing your valuable insights on this important issue.
**Closing Remarks:** This case serves as a stark reminder of the vulnerability of financial systems to sophisticated fraud and the importance of vigilance and collaboration between all stakeholders. As consumers, we must remain informed and report any suspicious activities to protect ourselves and maintain trust in the financial industry.
